But then you’re also, it’s a high cost area as you know, so it’s, although that’s typical, that’s all of California is that way and then you’re into what the market environment looks like. And so what we’ve typically seen in California is when there’s operating upsets and supply is impacted, then you see an increase in margins and the financials look respectable, but there are — when everything’s running well, it’s more challenged.
Doug Leggate: Thanks very much indeed, Kevin. We’ll look forward to that. Thanks.
Operator: The next question comes from the line of John Royall with JPMorgan. Please go ahead, John.
John Royall: Hi. Thanks for taking my questions. So my first question is on the balance sheet. You guys had guided to hitting the top end of your leverage range by year end 2023. You’re finishing a bit above that, which I think was just driven by the working capital impact of falling prices. So assuming a somewhat stable environment for working capital and price in 2024, do you have any updated guidance on when you think you’ll get back into that range?
Kevin Mitchell: Yeah. John, you’re right that the working capital tailwind that we expected to see for a variety of reasons didn’t quite materialize the way that we thought they would and that probably impacted us by 2 percentage points to 3 percentage points on the net debt to capital metric. We expect to make some modest progress on a debt reduction in 2024. We have a total of $1.1 billion of maturities in 2024 at the Phillips 66 level. And so that gives us some flexibility in terms of how we manage this. I will say though, that the working capital component is always a little bit of a wild card, because it can swing us to the tune of a couple of billion dollars over the course of a quarter and that has an impact on the stated metrics.
So I think what I’d say is that, we still target the 25% to 30% range, but when you step back and look in aggregate terms, we’re very comfortable with where we are, and our capital allocation decisions are going to be made with consideration of all the different priorities that we’ve got out there of which the balance sheet and debt is one of them. So I don’t want to commit to any sort of rash decisions just to target that one particular metric. We want to make sure we make the right overall decisions factoring in all of the different priorities.
John Royall: Understood. Thanks, Kevin. And my next question is just on the turnaround guide for the year. You took a pretty big year in 2022 or a very big year in 2022, which I think was somewhat of a catch-up year. Last year was a pretty meaningful step down and the guidance looks like 2024 is basically same ballpark as 2023. So should we think of the average — an average turnaround year from here as being somewhere in that kind of $600 million range and does the Rodeo conversion change that at all?
Rich Harbison: John, I’ll take that. This is Rich. Yeah. I think that the range that we’re at last year and this year is what you would consider an average year for us and the outlook for this year stays in that. Like most companies, we do concentrate our plan maintenance activity in the first and fourth quarters in our system in any given year and we tend to lighten those during the driving season, second quarter and third quarter of the year. But the way our turnarounds are working and a huge effort by the organization, which I need to compliment them, is to really flatten out these heavy peak periods in our turnaround cycles. Now, we will occasionally get a couple sites that get stacked up on ourselves, but what we’ve really tried to do is push those out, level out the spend on a long-term basis and work towards this $500 million to $600 million range as our average turnaround cycle.
So there will be a few years that will be a little bit higher than that and then there will be some that may be slightly under that as well. But in a general sense, that’s a good number to use.
John Royall: Thank you.
Operator: The next question comes from Paul Cheng with Scotiabank. Please go ahead, Paul.
Paul Cheng: Hey, guys. Good morning.
Mark Lashier: Good morning, Paul.
Paul Cheng: Maybe the first one is for Kevin. Thank you. Kevin, can you tell us what in the fourth quarter was running at and what is the cost associated with that? And in the first quarter, the $100 million of decommissioning and decommissioning expense, I suppose that’s going to run through and not being treated as a special item?
Kevin Mitchell: So, Paul, what was the first part of the question? I missed that first piece.
Paul Cheng: We’re trying to understand that without with Rodeo, what is the through-put run rate in the fourth quarter and what is the cost? Actually, yes, or that if you can tell us that what is Rodeo cost in the fourth quarter and what is the run rate also?
Mark Lashier: So, Rodeo performance in the fourth quarter versus the first quarter.
